What combination of factors has been proposed as the cause of the severe economic downturn that began in 2007?
A) the failures of both the Clinton and Obama administrations to institute single-payer health care
B) the Bush-era tax cuts followed by Tea Party demands to reduce the federal budget
C) a decline in home values followed by defaults on risky loans and the declining value of mortgage-backed securities
D) the government takeover of Freddie Mac and Fannie Mae combined with the refusal to save Lehman Brothers

Question

Quizplus · Accepted Answer

The severe economic downturn that began in 2007, often referred to as the Great Recession, was largely attributed to a decline in home values, which led to defaults on risky loans and a subsequent decline in the value of mortgage-backed securities. This created a domino effect that impacted the broader financial system and economy.

What Combination of Factors Has Been Proposed as the Cause